S&P Global projects India’s GDP growth at 7.3% in 2022-23, 6.5% for next fiscal

Global ratings agency S&P Global Ratings has projected India’s economic growth to be at 7.3 per cent for the current fiscal and 6.5 per cent for the next fiscal. S&P also said that India’s growth will be supported by domestic demand recovery after the COVID-19 pandemic. It underscored, “We have retained our India growth outlook at 7.3 per cent for the fiscal 2022-23 and 6.5 per cent for the next fiscal year, although we see the risks tilted to the downside.”

The ratings agency also cited downside risks and said inflation is likely to remain above the Reserve Bank of India’s (RBI) upper threshold of 6 per cent till 2022-end. The agency further mentioned that elevated core inflation would increase policy rates in India and projected policy rates to 5.90 per cent by the end of this fiscal. 

Commenting on India’s inflation numbers, S&P Global Ratings said, “India headline consumer price inflation (SPI) is likely to remain outside the Reserve Bank of India’s upper tolerance limit of 6 per cent until the end of 2022. That’s amid substantial weather-induced wheat and rice price increases as well as sticky core inflation. And food inflation may rise again.”

International institutions like the International Monetary Fund (IMF) and rating agencies like Goldman Sachs, Morgan Stanley and Asian Development Bank (ADB) cut India’s GDP growth projection. The International Monetary Fund (IMF) reduced its GDP forecast from 8.2 per cent to 7.4 per cent. 

Goldman Sachs cut India’s GDP growth forecast for full-year 2022 from 7.6 per cent to 7 per cent. Asian Development Bank (ADB) slashed India’s growth projections by 50 basis points from 7.5 per cent to 7 per cent earlier. Morgan Stanley also capped India’s GDP growth to 7.2 per cent in the current fiscal. 

(With agency inputs)

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